Beckley Health Partners, LTD D/B/A The Villages at Greystone, Chancellor Senior Management, LTD, and Megan Ward Wilson, Residence Manager v. Cynthia F. Hoover ( 2022 )

FILED
June 15, 2022
released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
No. 20-0680, Beckley Health Partners, LTD, d/b/a The Villages at Greystone; Chancellor
Senior Management, LTD; and Megan Ward Wilson, Residence Manager v. Cynthia F.
Hoover, Durable Power of Attorney of Elveria M. Faw. 1
Armstead, Justice, concurring, in part, and dissenting, in part:
The petitioners in this matter, Beckley Health Partners, LTD, d/b/a The
Villages at Greystone, Chancellor Senior Management, LTD, and Megan Ward Wilson,
Residence Manager, (together, “Greystone”) challenge the circuit court’s refusal to compel
the respondent, Cynthia Hoover, in her capacity as the administratrix of her mother’s estate
(the “Estate”), to submit to arbitration. The majority opinion affirms the circuit court’s
refusal to compel arbitration, and I concur with most of the majority opinion’s analysis.
Nevertheless, because I believe that the Estate is bound by the Residential and Community
Arbitration Agreement (“Arbitration Agreement”) under the doctrine of estoppel, I
respectfully dissent and would reverse the circuit court on this issue.
Estoppel.
Ms. Faw signed neither the Arbitration Agreement nor the Assisted Living
Residency Agreement (“Residency Agreement”). Although Ms. Hoover signed both
agreements as “Responsible Party,” the majority finds that she lacked authority to bind her
1
This is how the petitioners have styled their appeal. However, as the
majority opinion notes, Ms. Hoover actually appears as Ms. Faw’s administratrix.
mother at the time she executed these documents. 2 Nevertheless, there are “five traditional
theories under which a signatory to an arbitration agreement may bind a non-signatory[,]”
including “estoppel[,]” which is the one most relevant to the facts of this case. Syl. Pt. 4,
in part, Bayles v. Evans, 243 W. Va. 31, 842 S.E.2d 235 (2020) (quoting Syl. Pt. 10,
Chesapeake Appalachia, L.L.C. v. Hickman, 236 W. Va. 421, 781 S.E.2d 198 (2015)). 3 “A
nonsignatory is estopped from refusing to comply with an arbitration clause ‘when it
receives a “direct benefit” from a contract containing an arbitration clause.’” Int’l Paper
Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 418 (4th Cir. 2000)
(quoting American Bureau of Shipping v. Tencara Shipyard S.P.A., 170 F.3d 349, 353 (2d
Cir.1999)). The logic for this rule is simple: “a nonsignatory who seeks to reap the benefits
of a contract must bear its burdens as well.” Bayles, 243 W. Va. at 41, 842 S.E.2d at 245.
As Bayles explains,
“[d]irect-benefit estoppel involve[s] non-signatories who,
during the life of the contract, have embraced the contract
despite their non-signatory status but then, during litigation,
attempt to repudiate the arbitration clause in the contract.”
Hellenic Inv. Fund, Inc. v. Det Norske Veritas, 464 F.3d 514,
517-18 (5th Cir. 2006). “A non-signatory can ‘embrace’ a
contract containing an arbitration clause in two ways: (1) by
knowingly seeking and obtaining ‘direct benefits’ from that
contract; or (2) by seeking to enforce the terms of that contract
or asserting claims that must be determined by reference to that
contract.” Noble Drilling Servs., Inc. v. Certex USA, Inc., 620
2
As the majority opinion correctly observes, Ms. Hoover did not have a
power of attorney from her mother until days after she signed the Residency Agreement
and the Arbitration Agreement. Moreover, the power of attorney subsequently granted to
Ms. Hoover expressly excluded the ability to enter into arbitration agreements.
3
The remaining four theories are “(1) incorporation by reference; (2)
assumption; (3) agency; [and] (4) veil-piercing/alter ego[.]” Id.2
F.3d 469, 473 (5th Cir. 2010). When the nonsignatory
knowingly exploits the contract containing the arbitration
clause and obtains a direct benefit from that contract, “[c]ourts
have applied direct benefits estoppel to bind a non-signatory to
an arbitration agreement[.]” Id.Id. at 41–42, 842 S.E.2d at 245–46 (emphasis and first alteration added).
In this case, the Estate admittedly seeks compensatory and punitive damages
occasioned by Greystone’s alleged statutory violations and negligence and does not appear
to seek to enforce the Residency Agreement or assert claims that must be determined by
reference to that document. However, I believe that Ms. Faw embraced the Residency
Agreement and obtained benefits under such agreement by residing at Greystone.
The Residency Agreement functioned, for all intents and purposes, as a
quasi-lease agreement between Greystone and Ms. Faw.4 The Residency Agreement
identified the apartment that Ms. Faw would occupy and provided that Greystone who
would be responsible for utilities and maintenance of the apartment. In addition, the
Residency Agreement stipulated the services—like housekeeping, meals, transportation,
and nursing care—that Ms. Faw would receive. Perhaps most importantly, the Residency
Agreement established the Monthly Rental Fee that Ms. Faw paid for her use of the
apartment and receipt of services. Ultimately, and as the circuit court found, Ms. Faw “was
provided with care and services under the terms of the Residency Agreement” for “the
period of time that Ms. Faw resided at Greystone[.]”
4
According to the Residency Agreement, it did not convey “the rights of a
‘tenant’ as that term is defined by state law.”
3
Arbitration Agreement.
Because Ms. Faw “reap[ed] the benefits of” the Residency Agreement during
her time as a resident, the Estate “must bear its burdens as well.” Bayles, 243 W. Va. at
41, 842 S.E.2d at 245. Thus, the question becomes whether the Residency Agreement
bound the Estate to submit its claims to arbitration, and I believe it did. The Residency
Agreement expressly provides that the “Arbitration Agreement of even date herewith shall
govern any and all disputes of the parties.” The majority opinion attempts to avoid the
significance of this language by pointing out that the Arbitration Agreement, which was
contained in a separate document, states that its “execution . . . is not a precondition to the
furnishing of services to the Resident by the Community” and that “this Arbitration
Agreement may be rescinded by written notice to the Community from the Resident within
30 days of signature.” Thus, according to the majority opinion, “Ms. Faw’s acceptance of
the benefits of the Residency Agreement [does not] equate[] to acceptance of the terms of
the Arbitration Agreement[,]” and it cannot be said that “it is inequitable for Ms. Faw to
have benefited from the Residency Agreement while permitting Administratrix Hoover to
pursue the Estate’s claims in court[.]” I disagree.
The Residency Agreement stated that the “Arbitration Agreement . . . shall
govern any and all disputes of the parties.” (Emphasis added.) Reading the two documents
together—as we must 5—I believe that it was possible for Ms. Faw or Ms. Hoover to refuse
Syl. Pt. 2, in part, Miller v. WesBanco Bank, Inc., 245 W. Va. 363, 859
5
S.E.2d 306 (2021) (“Separate written instruments will be construed together and
4
to be bound by the Arbitration Agreement by either (1) declining to execute it initially, in
that the provision of services under the Residency Agreement was not contingent upon
such execution, or (2) executing the Arbitration Agreement initially but also executing a
written notice of rescission within thirty days. There is no indication that Ms. Faw or Ms.
Hoover followed either such course.
The Residency Agreement provided that “any and all disputes of the parties”
would be subject to arbitration in accordance with the terms and conditions set forth in the
Arbitration Agreement. The majority is correct that the Arbitration Agreement states that
the “execution of this Arbitration Agreement is not a precondition to the furnishing of
services to the Resident by the Community.” However, the key word is “execution.” In
other words, it is true that the Petitioners could not turn Ms. Faw away if she or her
Responsible Party, Ms. Hoover, declined to execute the Arbitration Agreement. However,
that is not what occurred here. Ms. Hoover signed both the Arbitration Agreement and the
Residency Agreement (which referenced and incorporated the terms of the Arbitration
Agreement) as Responsible Party. There is no indication that Ms. Faw or Ms. Hoover ever
rescinded the Arbitration Agreement, and Ms. Faw benefitted from the residential and care
services provided by Petitioners pursuant to the Residency Agreement. Accordingly, I
believe Ms. Hoover is estopped from denying application of the Arbitration Agreement
and the Estate is bound by the Arbitration Agreement. Indeed, I believe that the majority
considered to constitute one transaction where the parties and the subject matter are the
same, and where there is clearly a relationship between the documents.”).
5
opinion gives insufficient weight to the words “shall govern any and all disputes of the
parties” from the Residency Agreement. Syl. Pt. 2, Antero Res. Corp. v. Directional One
Servs. Inc. USA, No. 20-0965, 2022 WL 1055592, at *1 (W. Va. Apr. 8, 2022) (“‘A contract
must be considered as a whole, effect being given, if possible, to all parts of the instrument.’
Syllabus, Clayton v. Nicely, 116 W. Va. 460, 182 S.E. 569 (1935).”). Accordingly, I
respectfully dissent as to the issue of estoppel and would reverse the circuit court and
remand this case for application of the Arbitration Agreement.
6